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U.S. Cattlemen's Association Supports Effort To Reduce Estate Taxes

The U.S. Cattlemen's Association (USCA) today commended the current effort to reduce estate taxes by increasing the exemption to $5,000,000 and reducing the highest estate tax rate to 35%. In November of 2009, USCA passed policy which supported raising the unified credit to $5,000,000, adjusting it for inflation thereafter and reducing the estate tax rate from 45% to 35%. The federal estate tax is scheduled to return on January 1, 2011, imposing a levy of up to 55% on estates valued at more than $1 million.

In a statement today, Jane Wooster, CPA, USCA Region II Director said, "Cattlemen across the country know how close to impossible it is to stay in business when your operating capital is virtually cut in half every time the family ranch transfers from one generation to the next. It's estimated that more than a half million American families will pay the estate tax over the next decade and many of those will be farm and ranch families. The lack of action on the matter creates a great deal of uncertainty for small business owners. In order to assure that young people will stay in farming and ranching, USCA has been working with members of Congress to implement its policy goals and we're gratified to see a proposed compromise that will achieve that."

USCA policy also supports retaining the stepped up basis; increasing to $2,000,000 the valuation discount available under section 2032A and a decrease in the percentage of farm assets required to qualify from 50% to 40% of the gross estate. USCA opposes preferential estate tax treatment for farms or ranches with environmental easements or legislation creating new tax incentives that would encourage more environmental easements unless those easements are donated and not purchased.

Estate taxes are imposed on earnings and assets that have already been subject to income, social security and other taxes at the federal and state level. "The estate tax, which was intended to break up large concentrations of wealth and promote economic opportunity, has instead become a barrier that many farm and ranch families and other small business owners cannot get over when the business is passed to the next generation," noted Wooster. "On top of the taxes, financial resources are expended on attorneys, accountants and insurance. According to the Joint Economic Committee Report of 1998, the estate tax amounts to less than two percent of total federal revenues while costing the government and taxpayers approximately the same amount collected for enforcement and compliance. It's time to take definitive action and resolve this issue once and for all."